However, it’s likely that you simply uncovered unknown problem areas. If over time, your budget results don’t match your expectations or financial needs, you may assume the plan is wrong. If I hadn’t told her that I was on a strict budget, I probably would have spent more. “For example, even talking about it helped me when I was shopping with my mom. “Talking to friends really helped me,” Wong says. Everyone needs to be on the same page and after the same goals for the budget to be successful.”īeing open with those around you about your budget can also help you create a support system while you work to get your finances on track. “You need to be aware of the other person’s attitudes about money and realize that your own aren’t universal. “If you have two people who have really disjointed approaches to money, that’s really going to be a problem in the long run,” Lovell says. Whether your budget affects your spouse, partner or roommate, communication about the established financial plan is crucial. Make sure everyone involved is on the same page.

“Make sure you approach it in a manner that you are comfortable with,” Beck says.ĥ. Whether it’s through an online budgeting program like Mint or Quicken or on paper, stick to whatever works best for you. Just as there are many ways to create a budget, there are also many ways to keep track of it. Don’t worry about finding the perfect record keeping method. “Once you have that, it’s a lot easier to maintain the budget if a big expense springs up.”Ĥ. “For example, allocate just as much to your savings as your emergency fund,” Wong says. It can help you finance unexpected expenses like medical bills so you don’t have to pull income from other areas. An emergency fund should be an essential component of every budget. Build an emergency fund into your budget. “It’s better to be approximately right than precisely wrong.”ģ.

“You don’t want things to slip away,” Lovell says. Budgeting month-to-month can accommodate everyday living expenses and bills, but a yearly budget can help you also plan for larger and more infrequent expenses, like income taxes or holiday presents. Stephen Lovell, a certified financial planner with Lovell Wealth Legacy in Walnut Creek, Calif., suggests budgeting for one year at a time. Establish your budget for a time period that’s long enough for you to see results. The hardest part of a budget is sticking to it, so the easier you can make it, the better.”Ģ. “If I have a problem area within my budget, like eating out or shopping, instead of trying to focus on everything and being too hard on myself, I pick that one area. “There are things that you will likely sacrifice when budgeting, but it’s very important to be realistic and understand your own habits,” says Kristin Wong, a contributor to the financial blog Get Rich Slowly. While a budget can be a great tool for managing finances, it can quickly become overwhelming if it’s overly detailed or idealistic. “If you … start thinking about as a way to concisely create a better environment for yourself using your resources, it will get that much easier,” says Leslie Beck, a certified financial planner at Compass Wealth Management in Maplewood, N.J.Īside from maintaining a positive mindset, here are eight guidelines to help you successfully build and manage a budget:ġ. However, creating and maintaining a budget doesn’t have to be a painful process. Just like dieting, budgeting is often associated with deprivation and cutting back.

8 steps to creating a personal budget